Hermes confirmed stronger-than-expected global demand for luxury goods on Thursday, joining industry leader LVMH and Gucci owner Kering in outshining third quarter results forecasts.
A sales rebound in mainland China, improvements in Hong Kong, a British surge thanks to a weaker pound and relative US resilience despite the stronger dollar have all lifted luxury stocks including LVMH, Kering, Hermes, Richemont, Burberry and Hugo Boss in the past month.
The luxury goods sector is trading on an average price to earnings ratio of 19.6 times against 18.9 times at the end of September and 17.7 times at the beginning of the year, according to Bernstein.
Chinese customers, the biggest buyers of luxury goods who make up more than a third of global demand, have been re-opening their wallets, luxury groups said, spurred in part by government policies encouraging local consumption.
“The driving trend is that the Chinese customer is slowly coming back,” Makiko Zuercher, who manages the 22-million euro Dynapartners Luxury Brands Fund, said.
